Best Shares For Long Term Investment
Here are a few stocks that can be an excellent long term bet. These are from across a very diverse range of industries
If you are a long term investor, you tend to always make returns in equities. In fact, equity shares have known to outperform other asset classes in the long term. We have selected a few stocks that offer great opportunities for long term investors. These include stocks that have a very low debt to equity ratio and which have shown good growth over the years. These stocks have the tremendous potential to generate money in the long term.
Here are a few stocks that are from sectors such as oil and gas and PET films.
ONGC
This is the nation's number one oil and gas exploration major. The stock is an attractive buy on account of a number of reasons. The first is that the shares are available at a near 52-week low and the price to earnings ratio of 5-6 times, is way below the long-term historical average of 10 times.
It's not possible to find a largecap that trades at a p/e of 5 to 6 times one year forward earnings. The business prospects of the company too are pretty much assured and rising crude prices are likely to benefit the company immensely.
In fact, if crude prices stay table at around the $65 per barrel mark, ONGC may not have to share the subsidy on kerosene and LPG as in the past.
Over the past few quarters the company has been adversely impacted by project delays and extended monsoon. However, the second half of this year is expected to be much better.
ONGC: Why it is a great long-term pick?
In FY 2021, the company's gas production is likely to get a boost with the KG-98/2 basin expected to come on-stream. Apart from this, increased production of oil would also contribute to revenues.
When compared to global peers like China National Offshore oil Corporation (p/e 9 times), Inpex (11 times), Santos (13 times) and Novotek (15 times), the shares of ONGC are trading at half the valuations. The dividend yield on the stock too is near 6 per cent.
The company is likely to declare a dividend sometime in Feb, which could take the dividend yield close to 6 per cent. Apart from this, ONGC shares are quoting at near 52-week lows of Rs 117. Buy the shares for long-term returns.
TV Today Network
TV Today Network is among the top media houses in the country. It runs popular news channels like Aaj Tak, Tez and India Today, apart from interests in radio and digital.
Recently, the company wanted to sell its radio business, however, it did not get the nod from the requisite authorities. The digital business has been growing at a brisk pace, though the radio business needs to improve significantly.
For the quarter ending Sept 2019, TV Today Network's numbers were not too encouraging. The company was largely hit on account of new tariff order. The EPS of the company fell from Rs 8.56 in the June quarter to 3.97 in the Sept quarter.
However, going ahead we expect a vastly improved performance as the company looks to consolidate its position.
TV Today Network: Stock near 52 week lows
The company's share prices has dipped substantially from levels of Rs 489, to the current levels of Rs 256. The stock is just 10 per cent above its 52-week low of Rs 239. At the current price the downward risk to the stock is minimal, given the already huge fall.
In fact, the company can report an EPS of Rs 22 by 2019-20, which makes the stock available at a p/e of just 13 times. It is also important to remember that media stocks receive a good discounting on the bourses and hence if we apply a discounting of 18 to 20 times, the stock has the potential to generate 40 per cent returns in 2-years time.
One can buy this stock from a long-term perspective.
Check stock quote of TV Today here
Polyplex Corporation
Polyplex Corporation is the sixth biggest player in the globe in terms of PET film. The company has its manufacturing and distribution presence in very important regional markets (India, Thailand, Turkey, USA and Indonesia).
It also has warehouses in Netherlands, Poland, Spain, Germany, Mexico and Italy and liaison offices in Singapore, Malaysia, Korea and Japan.
The company is implementing key projects including a greenfield - BOPET in Indonesia and a brownfield BOPP plant in Indonesia.
The company has a track record of declaring solid dividends year-on-year and in FY 2019, declared a dividend of Rs 51 per share, taking the dividend yield in excess of 8.84 per cent.
The stock is available at a p/e of just 10 times, one year forward earnings and could be a good pick for dividend yields.
UFO Moviez
UFO Moviez India Ltd came up with an IPO at a price of Rs 615 and is today trading at Rs 133. At these levels the dividend yield itself becomes extremely attractive.
UFO Moviez is India's largest digital cinema distribution company and in-cinema advertising platform in terms of number of screens.
The company also operates India's largest satellite-based, digital cinema distribution network using its UFO-M4 platform, as well as India's largest D-Cinema network. As on June 30, 2019, UFO's global network, along with subsidiaries and associates, spans 5,646 screens worldwide, including 5,244 screens across India and 402 screens across the Middle East, Israel, Mexico and the USA
Foreign Portfolio Investors and Foreign Venture Capitalists together own nearly 21 per cent of the shares as on June 30, 2019.
UFO Moviez: Solid On Financials
The company in FY 2019 reported an EPS of Rs 23.47, which means based on the trailing EPS the shares are traded at just Rs 6-7 times. The return on capital employed for 2019 was also a healthy 16.74 per cent.
Advertisement revenues at the company has grown from Rs 99.9 crores in FY 2014 to Rs 237.2 crores in FY 2019.
Most importantly in the next few years the company will generate high turnover, with low capex, given that most of the capex strain is now behind. UFO Moviez is likely to continue to do well in the coming years and investors can buy the stock for long term gains.
The shares are available at Rs 129, as compared to the IPO price of Rs 615-625.
Best small cap stocks to buy
In the past some small cap and mid cap stocks have given excellent returns. In fact, small cap stocks have beaten returns from large cap stocks, which have made them excellent bets for the long and short term. Please click on the link to see some excellent small cap stocks ideas.
Disclaimer
The article is not a solicitation to buy, sell in securities mentioned in the article. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author do not accept culpability for losses and/or damages arising based on information in this article. The author owns shares in ONGC.